
Latest figures from the Insolvency Service have shown that the number of registered business insolvencies in England and Wales was 1,966 in November 2024, 13% higher than in October 2024 (1,743) and 12% lower than the same month in the previous year (2,243 in November 2023).
The business insolvencies consisted of 254 compulsory liquidations, 1,565 creditors’ voluntary liquidations (CVLs), 132 administrations, 14 company voluntary arrangements (CVAs) and one receivership appointment.
In November 2024, CVLs accounted for 80% of all company insolvencies. The number of CVLs increased by 8% from October 2024 and was 15% lower compared to the same month last year (November 2023). The seasonally adjusted number of compulsory liquidations in November 2024 was 37% higher than in October 2024 and 6% lower than in November 2023.
The number of administrations in November 2024 was 36% higher than in October 2024 and 12% higher than in November 2023 after seasonal adjustment. The number of CVAs was 17% higher in November 2024 than November 2023 and 17% higher than in October 2024.
Tim Cooper, President of R3, the UK’s insolvency and restructuring trade body, and a partner at Addleshaw Goddard LLP, said “The monthly rise in corporate insolvencies is due to an increase in all forms of corporate insolvency process, with the most notable increases coming in Creditors’ Voluntary Liquidations (CVLs) and Compulsory Liquidations. Compared to this time last year, corporate insolvency numbers have fallen, and this is due to a reduction in CVLs and Compulsory Liquidations, while Administration numbers were higher last month than in November 2023.
“Fallout from the Budget and ongoing cost issues have driven corporate insolvencies this month. After years of rising outgoings and falling margins, businesses are facing further increases in wages as a result of the Chancellor’s announcement and this could be an expense too far for some firms.
“Members are telling us that enquiries have increased over the last month, as firms look to restructure or have early conversations about their financial concerns or their insolvency options ahead of the new year. This kind of activity won’t be reflected in the current set of insolvency statistics, but it provides an insight into the mood, challenges and concerns of the business community as we come to the end of another difficult year.
“In terms of sector activity, retailers saw a drop in sales in November, but many had anticipated this as consumers curtailed their spending ahead of Black Friday, while leisure and hospitality businesses saw an increase in consumer spending. Management teams in all three sectors will be hoping that Black Friday has fired the starting gun on the Christmas shopping and spending period, and that it will be a busy one as many firms in these industries have had a difficult year.
“The latest figures for the construction industry showed that output fell in October, and this was driven by a reduction in repair and maintenance work. Construction has suffered in recent years with disruptions to work and increased costs hitting margins and businesses, while the General Election and the Budget have affected work being commissioned and starting more recently. We’re now firmly into the winter months, and it remains to be seen how the weather will affect work on site and the sector’s output levels.”
John Cullen, Business Recovery Partner at Menzies said “Despite inflationary pressures easing, retailers are running out of options to secure their bottom lines amid the growing popularity of ecommerce and a seemingly never-ending period of high costs. These pressures are impacting retailers large and small, with many high street stalwarts like Ted Baker and Th Body Shop falling foul of financial difficulties this year.
“The recently applied GPSR ruling makes exporting to the EU and Ireland a much harder process for UK businesses too. Autumn Budget tax hikes similarly add more pressure to a sector already crying out for help.”